Plunkett v. Old Colony Trust Co.

• Decision Date: 12 September 1919
• Citation: 233 Mass. 471,124 N.E. 265
• Parties: PLUNKETT et al. v. OLD COLONY TRUST CO. et al.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

233 Mass. 471

124 N.E. 265

PLUNKETT et al.

v.OLD COLONY TRUST CO. et al.

Supreme Judicial Court of Massachusetts, Suffolk.

Sept. 12, 1919.

Case reserved from Supreme Judicial Court, Suffolk County.

Suit for instructions by Charles T. Plunkett and another as executors of William B. Plunkett, deceased, against the Old Colony Trust Company, of Boston, as trustee under testator's will, and others. On reservation by a single justice of the Supreme Judicial Court for the determination of the full court. Decree instructing plaintiff executors in accordance with the opinion ordered.

Charles N. Stoddard, of Greenfield, pro se.

Pillsbury & Dana, of Boston, for defendants.

RUGG, C. J.

This case is reserved upon the pleadings for the determination of this court. The material facts are that William B. Plunkett, late of Adams, in the county of Berkshire, died testate on the 25th of October, 1917, leaving as his heirs at law two sons, each of whom had children, and one of whom has since deceased. His will was executed on the 15th of September, 1909, the first codicil on the 23d of October, 1911, and second codicil on the 19th of July, 1917. None of these testamentary instruments contain any provision respecting the payment of succession or inheritance taxes under either state or federal laws. The state legacy and succession tax had been enacted prior to the execution of the will and remained in force as amended at the time of the execution of both codicils. St. 1909, c. 490, part 4. The federal ‘estate tax’ was enacted shortly before the execution of the last codicil. The estate of the testator was of such size that the federal tax assessed upon it was $72,476.15. The provision for one under the will and codicils was a gift outright of property valued at $14,275, and a gift of property valued at $382,616.75 to a trustee upon a spendthrift trust, to pay the income to that son during his life, with other life estates at his death and gifts over of the remainder. A legacy amounting to $126,760 was given to a trustee to hold until the testator's grandchildren should ‘arrive at the age of 25 years respectively,’ when it was to be divided equally among them. The residue of the estate, valued at $381,109.72, was bequeathed to the testator's other son. This petition by the executors is brought to determine whether federal tax which has been paid should be charged entirely against the residue of the estate or apportioned pro rata among all the devisees and legatees. That is the single question presented. An important factor in the answer of this question is the meaning of the federal statute on the point whether the tax is imposed with reference to the entire net estate or with reference to the particular devises, bequests or distributive shares.

The tax was established by the act of Congress of September 8, 1916 (39 Stat. 756, c. 463), entitled ‘An act to increase the revenue and for other purposes,’ as amended by Act March 3, 1917, c. 159, 39 Stat. 1000, and Act Oct. 3, 1917, c. 63, 40 Stat. 300. The relevant sections of the successive acts are grouped respectively under ‘Title II, Estate Tax,’ ‘Title III, Estate Tax,’ and ‘Title IX, War Estate Tax.’ The tax thus entitled is ‘imposed upon the transfer of the net estate of every decedent dying after the passage of this act.’ Section 201 (U. S. Comp. St. 1918, § 6336 1/2 b). Subsequent sections contain directions for the ascertainment of the net value of estates of deceased persons. Briefly and compendiously stated the net value comprehends all estate left by a decedent within the purview of the act after deducting debts, losses, and expenses of administration and an exemption of $50,000. Sections 202, 203 (sections 6336 1/2 c, 6336 1/2 d). The tax is in general terms and is a percentage upon the amount of the net estate. Section 201. It is due one year after the death of the decedent. Section 204 (section 6336 1/2 e). It must be paid by the executor or administrator, and no direction is found in the act for apportionment among legatees or devisees. Section 207 (section 6336 1/2 h). The intent is expressed by section 208 (section 6336 1/2 i) that, unless otherwise directed by will, the tax shall be paid out of the estate before distribution. The tax, if not sooner paid, is made a lien upon the gross estate for a period of 10 years, except that it is divested as to such part as is used to defray charges against the estate and expenses of administration when allowed by the court of appropriate jurisdiction. Section 209 (section 6336 1/2 j).

[1] The contention that the is on the particular devises, bequests or distributive shares is met at the outset by the heading or title given to the tax by the statute itself, which describes the kind of pecuniary imposition levied as an ‘estate tax.’ This is properly to be considered in interpreting a statute of the United States. Knowlton v. Moore, 178 U. S. 41, 65, 20 Sup. Ct. 747, 44 L. Ed. 969. The sections of the act prefaced by this heading or title refer exclusively to the value of the ‘net estate’ as the basis for the ascertainment of the tax. There is no mention whatever in this connection of legacies, devises or distributive shares. They are wholly omitted. The statute ignores utterly the disposition made of the estate by the testator or by the law as to intestate property, and looks only to the net estate itself as defined.

The words of the act of Congress imposing the tax point strongly toward the interpretation that the tax is on the estate and not on the particular devises, legacies or distributive shares. The words ‘net estate’ are used uniformly in the operative parts of the act to the exclusion of phrases of other significance.

Two considerations fortify this interpretation:

(1) The War Revenue Act of 1898, being an act approved on June 13 of that year (30 U. S. Stats. at Large, 464, 465) c. 448, §§ 29, 30, plainly and by its express words imposed a tax on particular legacies and distributive shares arising from the property left by a decedent and not on the whole personal estate so left. Knowlton v. Moore, 178 U. S. 41, 43, 65, 67, 71, 20 Sup. Ct. 747, 44 L. Ed. 969. The contrast between the terms of that earlier act and those of the present throws a clear light on the meaning of the act here in question. If Congress had intended to levy a tax on legacies and distributive shares, it naturally would have adopted the words of its act of 1898, which had been already used and whose signification had been established by the highest judicial authority. Employment of other language of quite different import indicates a change of purpose.

[2] (2) It is permissible to examine records of legislative proceedings incident to the passage of a statute to illumine its doubtful language, although its plain meaning cannot be thereby affected; but for this purpose resort commonly cannot be had to the debates of individual members. Old South Ass'n. in Boston v. Boston, 212 Mass. 299, 305, 99 N. E. 235 and cases there collected; United States v. St. Paul, Minneapolis & Manitoba Railway Co., 247 U. S. 310, 318,38 L. Ed. 525,62 L. Ed. 1130. The...